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EMC Corp (NYSE:EMC)
Beneish M-Score
-3.00 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

EMC Corp has a M-score of -3.00 suggests that the company is not a manipulator.

EMC' s Beneish M-Score Range Over the Past 10 Years
Min: -3.74   Max: -1.85
Current: -3

-3.74
-1.85

During the past 13 years, the highest Beneish M-Score of EMC Corp was -1.85. The lowest was -3.74. And the median was -2.76.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of EMC Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9674+0.528 * 1.0279+0.404 * 1.0238+0.892 * 1.0171+0.115 * 0.9945
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0557+4.679 * -0.1027-0.327 * 1.13
=-3.00

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $3,134 Mil.
Revenue was 6079 + 5997 + 5613 + 0 = $17,689 Mil.
Gross Profit was 3705 + 3587 + 3339 + 0 = $10,631 Mil.
Total Current Assets was $13,737 Mil.
Total Assets was $45,345 Mil.
Property, Plant and Equipment(Net PPE) was $3,791 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,917 Mil.
Selling, General & Admin. Expense(SGA) was $6,284 Mil.
Total Current Liabilities was $12,311 Mil.
Long-Term Debt was $5,474 Mil.
Net Income was 480 + 487 + 252 + 0 = $1,219 Mil.
Non Operating Income was 47 + 50 + 34 + 0 = $131 Mil.
Cash Flow from Operations was 1403 + 1033 + 1080 + 2231 = $5,747 Mil.
Accounts Receivable was $3,185 Mil.
Revenue was 6032 + 5880 + 5479 + 0 = $17,391 Mil.
Gross Profit was 3743 + 3654 + 3347 + 0 = $10,744 Mil.
Total Current Assets was $14,419 Mil.
Total Assets was $45,028 Mil.
Property, Plant and Equipment(Net PPE) was $3,629 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,820 Mil.
Selling, General & Admin. Expense(SGA) was $5,852 Mil.
Total Current Liabilities was $10,135 Mil.
Long-Term Debt was $5,494 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(3134 / 17689) / (3185 / 17391)
=0.17717225 / 0.1831407
=0.9674

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(3587 / 17391) / (3705 / 17689)
=0.61779081 / 0.60099497
=1.0279

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (13737 + 3791) / 45345) / (1 - (14419 + 3629) / 45028)
=0.61345242 / 0.59918273
=1.0238

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=17689 / 17391
=1.0171

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1820 / (1820 + 3629)) / (1917 / (1917 + 3791))
=0.33400624 / 0.33584443
=0.9945

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(6284 / 17689) / (5852 / 17391)
=0.35524902 / 0.33649589
=1.0557

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5474 + 12311) / 45345) / ((5494 + 10135) / 45028)
=0.39221524 / 0.34709514
=1.13

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1219 - 131 - 5747) / 45345
=-0.1027

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

EMC Corp has a M-score of -3.00 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

EMC Corp Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.0431.14970.86820.99281.00450.97221.07681.05161.0860.8916
GMI 1.01370.97250.98611.0010.93660.96930.96841.00770.99891.0282
AQI 1.06980.83831.01811.13871.14640.96271.03850.91131.05071.0334
SGI 1.15431.1861.12440.94281.21311.17591.08531.06941.05251.0108
DEPI 1.06790.91550.92490.99051.03020.94551.02181.010.97780.9995
SGAI 1.08151.01411.04591.05920.96421.02510.9960.97971.03361.0576
LVGI 1.69210.92060.97520.89460.98871.00110.88881.39360.99411.0505
TATA -0.0608-0.0832-0.0943-0.0839-0.0846-0.0886-0.0878-0.0824-0.0775-0.0773
M-score -2.78-2.63-2.94-2.85-2.64-2.81-2.71-2.91-2.70-2.93

EMC Corp Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 0.87931.06641.02851.00551.03241.0870.94430.95810.96740.6344
GMI 1.00311.00311.00421.00341.0031.0031.01071.02191.02791.018
AQI 0.90510.91130.99131.12241.07841.05071.04470.99431.02381.0334
SGI 1.05461.05461.04111.0381.05151.05151.05371.0441.01711.4204
DEPI 1.0341.011.01180.99040.96940.97780.96710.98270.99450.9995
SGAI 0.99130.99131.01791.04921.04871.04871.0521.03521.05571.0264
LVGI 1.36541.39361.29020.9590.95260.99411.09391.15751.131.0505
TATA -0.1045-0.108-0.1084-0.1104-0.1059-0.1048-0.1101-0.1054-0.1027-0.0772
M-score -3.18-3.04-3.02-2.90-2.86-2.83-3.02-3.02-3.00-2.80
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